RBS branded ‘disgraceful’
Secret probe blasts actions of lender’s small firms arm
PRESSURE piled on Santander boss Nathan Bostock after the “disgraceful” actions of a unit he oversaw were exposed by MPs.
Bostock, 57, joined Santander in 2014 from Royal Bank of Scotland where he was head of restructuring and risk. He was ultimately responsible for RBS’s now notorious Global Restructuring Group.
The full extent of GRG’s mistreatment of thousands of small and medium-sized firms was revealed yesterday when the Treasury Select Committee used parliamentary privilege to publish a dossier written by City regulator the Financial Conduct Authority.
The GRG was meant to help RBS business customers in trouble back to health, but the report found “widespread inappropriate treatment”. One internal GRG document entitled Just Hit the Budget referred to businesses as “basket cases” and giving firms enough rope “to let customers hang themselves”.
The FCA probe found staff errors were not to blame but rather “fundamental failings to ensure effective oversight and governance”.
Derek Sach, who ran GRG, was until recently advising private equity firm CVC. Stephen Hester, RBS chief executive at the time, now heads insurer RSA. Santander’s board in Spain has given UK chief Bostock its backing. Nicky Morgan, chairwoman of the Commons Treasury Committee, said it had “not taken the decision to publish lightly”.
She added: “The findings in the report are disgraceful. The overarching priority at all levels of GRG was not the health and strength of customers, but the generation of income for RBS.”
RBS apologised and said: “Although the most serious allegation – that we deliberately targeted otherwise viable businesses in order to distress and asset-strip them for the bank’s profit – has been shown to be without foundation, we know that the bank got a lot wrong.”